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The Doctrine of Tenure and Estates

11 Oct, 2015 INTELLECTUAL PROPERTY

THE DOCTRINE OF TENURE AND ESTATES


3.1   The history of feudalism


The doctrine of tenure has its origins in the feudal system of land ownership which emerged during the middle ages in England. Two important points can be gleaned from this fact alone: first, the doctrine of tenure is only relevant to interests relating to real property, and secondly, the social developments of modern society have meant that the incidents of the doctrine are no longer of great relevance, particularly in Australia. Feudalism has never existed in Australia and, as the doctrine of tenure is an emanation of this system, its continuing importance is negligible, particularly in light of the High Court determinations on native title in Mabo v Queensland (No 2) (1992) 175 CLR 1. As noted by Toohey J in Wik Peoples v The State of Queensland (1996) 141 ALR 129:


The decision of the court in [Mabo (No 2)] introduced a new and radical notion. It disturbed the previous attempts of the Australian legal system to explain all estates and interests in land in this country by reference to the English legal doctrine of tenure derived ultimately from the sovereign as Paramount Lord of the Colonies as he or she had been in England after the Conquest.


Nevertheless, as Australia has inherited the English system of land law, remnants of the doctrine remain. In order to appreciate fully these principles, an examination of the feudal origins of the doctrine is necessary.1


Simply defined, a feudal system represents a type of society in which the primary social force is the relationship between the lord and his tenant. Historically, this relationship was established for the mutual benefit of the tenant and the lord; the lord promised protection and defence of the tenant and the land occupied by the tenant in return for the loyalty and service of that tenant. The tenant held occupational rights upon the land, including the right to subsist on any produce grown on the land, and the lord protected that right, but the lord retained ultimate ownership of the land. This type of early tenure was known as ‘knight service’. The ultimate ‘lord’ of all lands in early English history was the king. The king granted land to his knights and protection over that land in return for their military loyalty and other personal services. However, the king retained absolute authority over that land which included the right to extract feudal dues.


The feudal system was operational during the 12th and 13th century in England and quickly became a founding social dynamic. It was successful because it operated on the basis of a fundamental exchange: personal services in return for land occupation and protection. Other forms of tenure which existed included: ‘frankalmoin’, where land was conferred in exchange for religious services; ‘serjeanty’, whereby land was conferred in exchange for a variety of different forms of personal services; and ‘socage’, which was a residual category that included agricultural services and the payment of monetary amounts.


Prior to the emergence of the feudal system, there was very little an individual could do to protect both himself and the land on which he subsisted from external invasion. The feudal system provided a much needed security net for individuals and assisted in the creation of a social hierarchy. Without a system of protectionism, chaos would have reigned. The transferral of ownership to a higher lord was considered a small price to pay for the assurance of a peaceful habitat. Naturally, the feudal system resulted in the centralisation of power and authority in the king which was mutually beneficial: the king acquired an army whilst still retaining ultimate control over the land.


In England, with the reign of William the Conqueror, all land came under the feudal system and was therefore protected; none remained ‘allodial’ (that is, without the protection of a lord). Furthermore, the land was divided into large tracts, and each tenant in chief retained control over these areas. The lords of each area governed the villagers (known as ‘villeins’) who worked the land to create subsistence and profit for these lords. The king did not interfere with the relationship between the lord and the villeins, and the rules governing their relationship were developed and administered separately from those regulating the king and the lord.2


3.2   Statute of Quia Emptores


The grants which were made directly to the knights were able to be sublet to further tenants. This meant that the person holding the land directly from the king no longer retained occupation of the land but passed this on to another person. The primary lord, known as the ‘tenant in chief’, passed on the right to use the land to a person who became known as a ‘mesne lord’. There was no limit to the number of mesne lords that could exist over a single piece of land. The process of subletting the grant of land in this way became known as ‘subinfeudation’. Inevitably, subinfeudation resulted in the creation of extremely complex and difficult land relationships.


Eventually, the Statute of Quia Emptores was introduced in 1290. The primary purpose of this statute was to prevent complicated subinfeudation from continuing. The concept underlying the legislation was that new tenants taking occupation of land from prior grantors would not create another link in the chain, but rather, would be substituted into the position of the previous grantor. Effectively, this meant that the grantor acquired the right to alienate the land to a new tenant; the new tenant took complete control over the land and the grantor stepped out of the picture completely.


For example, if the king granted rights over a particular area of land to A (the tenant in chief), who then, under the feudal system, conferred the right of occupation over to B (the mesne lord), then A would retain rights over B, with the ultimate lord being the king. After the Statute of Quia Emptores, if B wanted to grant his rights of occupation over to C, B could alienate those rights to C, who would then take the place of B in the chain of tenure. B would drop out of the chain completely. The statute did not, however, affect the ultimate ownership of the king.


The statute effectively prohibited the complex progression of subinfeudation by prohibiting all future forms and conferring the power upon all free tenants to alienate the whole or any part of their land to new tenants who would be substituted into the position of the grantor and hold the same services as the old. There was, however, a significant qualification to the operation of the statute: it only prohibited the future subinfeudation of fee simple grants and did not apply to other freehold estates such as the life estate or the fee tail. (For a discussion on the nature of freehold estates, see, further, in this chapter under 3.5, ‘The doctrine of estates’.)


Eventually, the statute helped to simplify the complexity of the tenurial relations under the feudal system. By prohibiting the future expansion of subinfeudation, the long chain of tenure was eventually reduced so that many pieces of land were held directly to the king. Furthermore, with the passage of time, the old form of services was replaced by a pecuniary equivalent. Instead of the tenant in chief conferring military services as a ‘knight’ or other personal or religious services, the king and eventually Parliament began to demand a monetary payment for all grants. By the time the Tenures Abolition Act 1660 was introduced, abolishing most of the remaining features of the feudal system, the traditional incidents of tenure had already been greatly reduced.


Upon annexation, it was assumed that the Australian colonies also adopted the doctrine of tenure as it operated under the quia emptores system, retaining all the fundamental principles of the English feudal system. According to British imperial law, colonisation of an uninhabited land automatically results in an assumption of sovereignty by the Crown. The concept of sovereignty in this respect is broken down into two primary components: sovereignty of power and sovereignty of title. Sovereignty of power gave the Crown full power to control and legislate over the land, whilst sovereignty of title conferred radical title upon the Crown, thereby enabling it to issue tenurial grants to grantees in a similar manner to that which had existed under the feudal system in England. The form of tenure which Australia adopted was referred to as ‘free and common socage’ and had existed in England since the introduction of the Tenures Abolition Act 1660. The relevant legislative provisions in Australia are s 5 of the Imperial Acts Application Act 1980 (Vic) and s 37 of the Imperial Acts Application Act 1969 (NSW).


One of the most important incidents of the doctrine of tenure which the Australian colonies inherited from the English system was the concept of escheat. Escheat essentially gave the Crown the right to the property of a deceased, intestate person without any heirs (proper defectum sanguinis) or in circumstances where the tenant had committed a crime. Today, the concept of escheat has been abolished and replaced by the notion of bona vacantia (Lang’s Act 1863 (26 Vic c 20)).3 Bona vacantia means that property may pass on to the Crown as ‘property without an owner’ rather than reverting to the Crown as ultimate owner. The eradication of escheat and its replacement with bona vacantia can be seen as an important watershed for the operation of tenure in Australia, indicating the altered character of the Crown’s right to title. Under escheat, the Crown resumed control over land in which it always had ultimate ownership, and therefore the title was reverted; under bona vacantia, the Crown acquires subsequent rights to the land because the deceased has left no heirs, and therefore the title is successive. Bona vacantia effectively means that the Crown acquires a new title rather than resuming control over property it had always owned.4


3.3   The meaning of radical title


An important aspect of the doctrine of tenure in Australia is sovereignty of title. In order to appreciate the operation of Australian tenure, the meaning and scope of sovereign or ‘radical’ title needs to be explored. In England, radical title refers to the title automatically assumed by the Crown once lands were either acquired or conquered. As the historical background to the settlement of Australia was never classified in terms of a ‘conquering’ of the lands, the application of radical title in Australia is quite different. According the traditional construction of Australian history, upon the annexation of what were classified as ‘uninhabited’ colonies, the Crown acquired sovereignty of power and radical title over all lands. The radical title held by the Crown is based upon the premise that the sovereign, supreme lord is the ultimate possessor of all lands. Once radical title is assumed, it confers upon the Crown the right to issue tenurial grants and to remain absolute owner of all unalienated lands.5


It is important, however, to distinguish between radical title and full beneficial title. The radical title that the Crown acquires as a ‘concomitant’ of tenure exists merely to enable the Crown to become ‘paramount lord’, through the exercise of sovereign power, over all who hold a tenure granted by the Crown. It is not a corollary of this to assume that the title acquired by the Crown was absolute beneficial title which would effectively exclude all other claims. It is not necessary for the doctrine of tenure that Crown title be absolute and exclusive of all other interests. Absolute beneficial title to the land can only exist where the land is truly terra nullius and the myths of extended terra nullius have now been exploded by the Mabo decision. This is well summarised in the leading judgment of Brennan J:


The notion of radical title enabled the Crown to become paramount lord of all who hold a tenure granted by the Crown and to become absolute beneficial owner of unalienated land required for the Crown’s purposes. But it is not a corollary of the Crown’s acquisition of a radical title to land in an occupied territory that the Crown acquired absolute beneficial ownership of that land to the exclusion of the indigenous inhabitants. If the land were desert and uninhabited, truly a terra nullius, the Crown would take an absolute beneficial title (an allodial title) to the land…there would be no other proprietor. But if the land were occupied by the indigenous inhabitants and their rights and interests in the land are recognised by the common law, the radical title which is acquired with the acquisition of sovereignty cannot itself be taken to confer an absolute beneficial title to the occupied land. Nor is it necessary to the structure of our legal system to refuse recognition to the rights and interests in land of the indigenous inhabitants. The doctrine of tenure applies to every Crown grant of an interest in land, but not to rights and interests which do not owe their existence to a Crown grant. The English legal system accommodated the recognition of rights and interests derived from occupation of land…


Following the Mabo decision and in order to ensure recognition of native title rights, radical title will vest a bare legal right in all lands in the Crown and operate as a ‘postulate of the doctrine of tenure’; the historical reassessment by the High Court in Mabo means that full beneficial title cannot be conferred upon the Crown because the land was not ‘truly terra nullius’. Hence, the radical title that is assumed is bare, and the usual beneficial rights associated with full title do not attach. Despite its description as a ‘pure legal estate’, radical title will, nevertheless, entitle the Crown to issue full beneficial estates to grantees pursuant to the doctrine of tenure and to acquire ‘plenary title’ in circumstances where the Crown has expressly appropriated land for its own use. Furthermore, following the Mabo decision, radical title is capable of being burdened by native title rights which may be raised by indigenous persons. The nature of radical title in this context is properly described by Viscount Haldane in Amodu Tijani v Secretary, Southern Nigeria [1921] 2 AC 399, p 403:


As a rule, in the various systems of native jurisprudence throughout the Empire, there is no such full division between property and possession as English lawyers are familiar with. A very usual form of native title is that of a usufructuary right, which is a mere qualification of or burden on the radical or final title of the sovereign where that exists. In such cases the title of the sovereign is a pure legal estate, to which beneficial rights may or may not be attached.


Native title may burden radical title unless the radical title has been transformed, through the conferral of an estate or express appropriation, into a full beneficial title. The Mabo decision makes it clear that, in the absence of such acts having occurred, native title may be recognised consistently with radical title and will not be extinguished by the mere assumption of sovereign power.


As noted by Brennan CJ in Mabo (No 2), ‘It is only the fallacy of equating sovereignty and beneficial ownership of land that gives rise to the notion that native title is extinguished by the acquisition of sovereignty’.6


The question of when radical title may be transformed into an absolute beneficial title, or plenum dominium, so as to extinguish native title, was directly raised in the important High Court decision of Wik Peoples v The State of Queensland (1996) 141 ALR 129, in which Brennan CJ (in dissent) concluded that the radical title retained by the Crown upon the granting of a pastoral lease would expand into a plenum dominium in the form of a reversionary interest which was capable of extinguishing native title. His Honour noted that this was a natural consequence of the interplay between the doctrine of tenure and the doctrine of estates, both of which continue to function as founding principles in our system of land interests, and it is too late to contemplate constructing a different system:


It is only by treating the Crown, on exercise of the power of alienation of an estate, as having the full legal reversionary interest that the fundamental doctrines of tenure and estates can operate. On those doctrines the land law of this country is largely constructed. It is too late now to develop a new theory of land law that would throw the whole structure of land titles based on Crown grants into confusion.7


Significantly, however, this conclusion was not accepted by Toohey J (in the majority), who felt that the doctrine of estates should be regarded separately to radical title and that the two should not interact where the effect would be to extinguish native title over large tracts of land. His Honour noted that the doctrine of estates is essentially ‘a feudal concept’ used to ‘explain the interests of those who held from the Crown, but not the title of the Crown itself’. His Honour said, ‘to contend that there is a beneficial reversionary interest in the Crown which ensures that there is no room for the recognition of native title rights is, in my view, to read too much into the Crown’s title’.8


3.4   The doctrine of tenure and the Mabo decision


The exact scope of the doctrine of tenure in Australian colonies has been reassessed in the controversial aboriginal land rights case, Mabo v The State of Queensland (1992) 175 CLR 1. In this decision, the High Court re-examined the underlying foundation of the doctrine of tenure, and in so doing, limited its application with respect to indigenous inhabitants of the Australian colonies. The court held that upon annexation of the Australian colonies, the Crown retained radical title over all of the land; however, absolute beneficial title could not be assumed in areas already occupied by indigenous inhabitants, because this could not truly be regarded as ‘uninhabited land’. To this extent, the doctrines of terra nullius and extended terra nullius were abolished. In the leading judgment, Brennan J made the following comments:


…it is not a corollary of the Crown’s acquisition of a radical title to land in an occupied territory that the Crown acquired absolute beneficial ownership of that land to the exclusion of the indigenous inhabitants. If the land were desert and uninhabited, truly a terra nullius, the Crown would take an absolute beneficial title (an allodial title) to the land… But if the land were occupied by the indigenous inhabitants, and their rights and interests in the land are recognised by the common law, the radical title which is acquired with the acquisition of sovereignty cannot itself be taken to confer an absolute beneficial title to the occupied land. Nor is it necessary to the structure of our legal system to refuse recognition to the rights and interests in land of the indigenous inhabitants. The doctrine of tenure applies to every Crown grant of an interest in land, but not to rights and interests which do not owe their existence to a Crown grant.


Uninhabited land has traditionally been defined according to the principle known as terra nullius (literally meaning ‘land of no one’). Where the land was terra nullius, the sovereign acquired full and absolute beneficial title. ‘Uninhabited’ was not only defined as unoccupied; it also included circumstances where the land was, in fact, physically occupied. However, this occupation was considered so different from the forms and customs of British society that it did not fit within the established British concept of ‘occupied land’. Consequently, according to British imperial law, the land was treated as ‘uninhabited’. This extended notion of uninhabited and terra nullius was applied to the indigenous inhabitants of Australia to justify an assumption by the Crown of absolute beneficial ownership over all lands to the exclusion of indigenous occupants. This notion of extended terra nullius has, however, now been rejected by the High Court in the Mabo decision.


Brennan J concluded that the extended theory of terra nullius, establishing that indigenous inhabitants of a ‘settled’ colony had no proprietary interest in their ancestral land, depended upon a discriminatory denigration of indigenous inhabitants and their social organisation and customs, and it ignored and devalued their whole way of life. His Honour felt that the common law should not be, or be seen to be, frozen in an age of racial discrimination, and the fiction by which the rights and interests of indigenous inhabitants in land were treated as non-existent was justified by a policy which has no place in the contemporary law of this country. Hence, the doctrine of tenure was read down so that the Crown only acquired sovereignty of power and radical title over land which was capable of being burdened by native title rights.


Significantly, the High Court did not abolish the doctrine of tenure altogether. The ‘skeletal’ principles of the doctrine were retained. As Brennan CJ noted:


It is not surprising that the fiction that land granted by the Crown had been beneficially owned by the Crown was translated to the colonies and that Crown grants should be seen as the foundation of the doctrine of tenure which is an essential principle of our land law. It is far too late in the day to contemplate an allodial or other system of land ownership. Land in Australia which has been granted by the Crown is held on a tenure of some kind, and the titles acquired under the accepted land law cannot be disturbed.


Nevertheless, even though native title could be recognised, it could still be extinguished through either the grant of an estate over the land which was inconsistent with the rights of native title holders or the introduction of legislation which either acquired the land for Crown purposes or had the effect of extinguishing, modifying or altering native title in some way: see Chapter 6 for more detail on the nature of native title and how it may be extinguished.


Inevitably, the Mabo decision has substantially altered the operation of the doctrine of tenure in Australia. Whilst recognising the ‘fiction’ that tenure represents, and accepting its basic vestiges, the decision severely limits its application to land which can be proven to be subject to traditional native title. The abolition of extended terra nullius has paved the way for an acceptance of the existence and validity of indigenous land rights which operate independently of the tenure system. The relationship which the holders of native title rights have with the Crown is not tenurial: native title has not been expressly conferred by the Crown and there are no tenurial rights and incidents associated with native title. In this respect, native title exists outside the doctrine of tenure, because it does not owe its existence to a Crown grant.9


The aftermath of the Mabo decision upon the doctrine of tenure is discussed by Edgeworth, who states:


Predictably, the significance of these various differences led the majority of the court to query whether the doctrine of tenure was to a meaningful degree appropriate to Australian land law at any stage from the time of settlement onwards. After all, once these differences are catalogued, the local animal begins to look very unlike its imperial progenitor. Yet despite overruling the cluster of cases which extended the terra nullius doctrine to the Australian colonies, their Honours refused to go one step further and unequivocally reject the doctrine of tenure… The implicit conclusion of Brennan J’s argument is that the doctrine of tenure denotes little more than the legal capacity of the Crown to confer valid title to land on citizens, or, more simply, radical title—a public rather than a private law concept.10


The subsequent decision by the High Court in Wik Peoples v The State of Queensland (1996) 141 ALR 129 represents a further endorsement of this new approach to tenure, and the High Court displays a clear desire to protect the ‘new and radical notion’ of tenure which the Mabo decision outlined. In line with the Mabo decision, in Wik, Toohey J concluded that radical title was ‘not a real title for property purposes’, but more ‘in the nature of a political notion and, in that sense, a legal fiction’.11 As such, his Honour concluded that radical title could not be transformed into absolute title so as to extinguish native title rights without proving the clear exercise of sovereign power and proof that the legal rights associated with such an exercise were directly inconsistent with those existing under native title.

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